Macronix International Co (旺宏電子) yesterday said that stronger-than-expected demand for memory chips from its top client, Nintendo Co, and other new products would fuel growth momentum in the second half of this year, shrugging off the effects of the US-China trade row.
US trade sanctions on Huawei Technologies Co (華為) would barely dent the chipmaker’s shipments to the Chinese company, Macronix said.
The US ban has taken a toll on Huawei, causing its smartphone sales to drop 40 percent over the past month and could cut its revenue by US$30 billion in the next two years, Huawei founder Ren Zhengfei (任正非) told a panel discussion in Shenzhen, China, on Monday.
“Fortunately, we produce very few memory chips for mobile phones,” Macronix chairman Miin Wu (吳敏求) told reporters on the sidelines of the company’s annual general meeting, implying limited impact from the Huawei ban.
While Huawei is one of the Hsinchu-based chipmaker’s top three clients, it accounts for less than 10 percent of its revenue, Wu said.
Macronix primarily supplies NOR flash memory chips used in Huawei’s 5G base stations, he said.
As global trade becomes chaotic due to the trade spat, Macronix is more cautious about the outlook for the second half, Wu said.
“It is certain that the second half would be better than the first half. However, we are not so sure how robust the strength would be,” Wu said, referring to the trade dispute, which has shaken global business confidence and reduced Macronix’s order visibility.
Two months ago, Wu anticipated that the dispute would be over by the end of this month.
However, now, the chances of the world’s two biggest economies resolving the dispute looks slim, he said.
“As uncertainty is high, clients tend to place short-term orders, rather than long-term ones. That makes it difficult for us to make forecasts,” Wu said.
However, orders from long-term client Nintendo “has exceeded our expectations in the past two months,” he said. “Demand is better than we thought.”
Nintendo’s strong demand for ROM memory chips helped boost Macronix’s revenue to NT$2.72 billion (US$86.27 million) last month, up 30 percent from April.
“That is very unusual, as the first and second quarters are usually slow seasons,” Wu said.
To further fuel growth, Macronix plans to mass produce advanced 19-nanometer NAND flash memory chips in the fourth quarter, he said.
The chipmaker has budgeted NT$14.2 billion for new facilities and equipment this year, mostly for 19-nanometer technology.
Shareholders approved a plan to distribute a cash dividend of NT$1.2 per share, representing a 40.49 percent payout ratio based on earnings per share of NT$4.94 last year. That implies a dividend yield of 5.57 percent, based on the stock’s closing price of NT$21.55 yesterday.
The seizure of one of the largest known mercury shipments in history, moving from mines in Mexico to illegal Amazon gold mining zones, exposes the wide use of the toxic metal in the rainforest, according to authorities. Peru’s customs agency, SUNAT, found 4 tonnes of illegal mercury in Lima’s port district of Callao, according to a report by the non-profit Environmental Investigations Agency (EIA). “This SUNAT intervention has prevented this chemical from having a serious impact on people’s health and the environment, as can be seen in several areas of the country devastated by the illegal use of mercury and illicit activities,”
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
Taiwan’s property transactions in the first half of this year fell 26.4 percent year-on-year to about 130,000 units, as credit controls and mortgage restrictions dampened demand, data from the Ministry of the Interior showed yesterday. Keelung saw the steepest decline, with transactions plummeting 45.6 percent to just 2,041 units — the lowest since the ministry began its survey in 2006. In contrast, Miaoli County was the only region to experience year-on-year growth, with transactions rising 2.4 percent to 3,229 units. Great Home Realty Co (大家房屋) attributed the increase in deals in Miaoli, particularly Jhunan (竹南) and Toufen (頭份) townships, to spillover demand
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